Superstrike v Rodrigues, Immigration and the ASA regulation changes

The last month has been an exceptionally busy one for the letting agents around the UK as we battle to ensure we comply with the changes that are coming thick and fast to our industry. We have had new test cases hitting the headlines in relation to deposit registration with the Superstrike v Rodrigues case, regulatory guidance from the ASA (advertising standards agency) and the proposed new legislation in relation to immigration due to hit from April next year, alongside the awaiting of many more potential legislation changes over the next quarter that also may be coming into effect, all of which will mean drastic changes to our processes and the way we run our businesses from now on.

The biggest surprise was the Superstrike case. This was a ruling by a judge that his interpretation of the rules are that, when a tenancy expires and therefore goes into SPT (statutory Periodic Tenancy) this is in fact a “new” tenancy, and therefore the deposit should have been re-registered, (unless you had a clause in the original contract stating that the contract would continue periodically upon its end) new prescribed information should have issued and the deposit registrations schemes guidance notes given too. This ruling goes against the guidance notes on the deposit registration schemes own sites and has quite frankly put the industry into a bit of chaos, as the industry leaders try to make sense of the ruling and offer advice as to what as agents we should be doing.

The ruling basically means now that as soon as a tenancy expires, all the deposit registration, issuing of prescribed info etc all has to be done again, but what if you are just “waiting” for the renewal memo to come in, do you have to do them then? What if your property has been in SPT for 3 years? All these are questions that need to be answered, without any clear definition offered.

Previously on the TDS site all an agent had to do was put the tenancy into SPT and that was it, but not anymore. Now failing to re-register and issue prescribed information can result in the same as not registering a deposit, 3 x the deposit fine, the return of the deposit to the tenant and not being able to use a section 21 to gain possession.

Industry leaders have offered guidance now, and I would advise all agents to check with their regulatory body and get their industry’s guidance notes and follow them. So for any agents that haven’t already, this needs urgent attention and processes changed immediately. The word on the street however is that it will all be changed back at some point, but it’s not worth the risk of just waiting and doing nothing.

CAP (Committee of Advertising Practice) guidance has been released to industry regulatory bodies on what is to be expected in relation to the “disclosure of tenant fees” on our adverts. From November 1st all agents will have to declare all their tenant fees that they will charge tenants on their adverts. The requirement is that ALL fees are shown on ALL adverts where a rent amount is stated and this will apply to landlords and agents alike. There is full guidance online on the following link and is a must read for ALL agents as this I’m sure will lead to many claims from tenants nationwide.

The guidance says that the fees stated do not have to include any fees that may be charged during the tenancy or the deposit amount, and also does not include fees that an agent may charge to landlords, but be careful and state all that you can in relation to tenant fees.

In order for this to “practically work” our computer software companies will need to make changes to their programs, to allow fees to be entered and uploaded to the property portals, and the property portals will have to make changes to their sites too, in order that fees may have a place on their displays.

The guidance sets outs many different ways in which this may be done and agents can consider setting up a fee page and offering a link to a page setting out all the fees, or they may wish to put the fees on the advert, or if on a portal, make use of the portals fee section when they have been created. These are the reasons they have given all till November 1st to comply, as there is a lot of work to be done, but we must all be looking into this now. Bear in mind that not ALL of our advertising in on a portal, what do we do about social media posts, property displays in windows etc. one thing it will make us all do I’m sure is look at our fees and simplify them, so we can get them into less space!

Finally the new Immigration requirements on landlords proposed from April next year, landlords are going to be responsible to find out if a tenant has a right to be here in the UK, and as agents, this responsibility will fall on us. So not only are we money laundering regulations inspectors with requirements for collecting proof of ID and Address for all landlords and tenants and reporting obligations, we are also tax collectors for landlords overseas with further IR reporting obligations, we are now required to be immigration inspectors as well, I suppose no one could say our job is boring!